The COVID-19 pandemic has redefined the nature, location, and conditions of work. Since the onset of the pandemic, the public workforce development system has been evolving to meet the changing needs of the U.S. labor force. The system—a government-funded network of federal, state, and local organizations that includes workforce development boards and career centers—typically acts as an intermediary between jobseekers, workers, and employers by providing critical in-person resources such as job search assistance and access to education, training, supportive services, and work. But in 2020, the system had to adjust to an unemployment rate that reached 14.7 percent—and the fact that the economy’s primary goal for jobseekers was no longer, in many cases, employment; rather, it was public health and financial stability. Partners at training providers and educational institutions paused their in-person offerings and scrambled to set up structures that would allow them to deliver services online. In some instances, career center staff pivoted to temporarily support overwhelmed unemployment insurance centers, helping a staggering, ever-increasing number of claimants receive unemployment benefits; some maintained this support even after resuming their own career services online.
By the first months of 2022, as the pandemic became the new normal and the unemployment rate gradually crept back to a healthier 4 percent, workforce development organizations across public, nonprofit, and private spheres invested in more online and remote services, such as online job fairs, new job-matching platforms, and virtual employment counseling sessions. They also connected jobseekers to hybrid or virtual training opportunities. Cities and states used funding from the American Rescue Plan (ARP) to support employment goals, making significant investments in workforce training, hazard pay, child care for working parents, K-12 and higher education career pathways, and more. Governors across the country are proposing historic workforce development investments to address so-called labor shortages in critical industries such as health care, manufacturing, technology, and the public sector workforce.
Yet, although the labor market has tightened and workers have gained some power, the past few months have illustrated that the United States is not facing a labor shortage so much as a good jobs shortage. And the pandemic has had a disproportionate economic impact on women and workers of color, exacerbating inequities that predated 2020. In January 2022, U.S. Secretary of Labor Marty Walsh announced the Good Jobs Initiative, which will work to build job quality by engaging employers, workers, and federal agencies through grants and contracts—a step in the right direction. Federal policymakers could accelerate this work and the public workforce development system’s role in it through adequate funding and reforms of the Workforce Innovation and Opportunity Act (WIOA), the legislation that authorizes and guides the public workforce system. However, the system has enough federal and state policy flexibility and local control to initiate many of these reforms ahead of federal legislative action. It is not just workers who have some power—the workforce system does too.
The past few months have illustrated that the United States is not facing a labor shortage so much as a good jobs shortage.
This article discusses existing challenges in the public workforce system and outlines three steps that it should take to address them: 1) prioritize quality jobs for jobseekers, 2) address the role of discrimination and segregation in the job market, and 3) leverage unique connections to government-funded or regulated jobs.
Public workforce system outcomes often reflect disparities in the labor market
Without a focused effort to address equity and quality, public workforce system outcomes will continue to reflect systemic disparities in the U.S. economy. A review of adults utilizing WIOA services from April 2019 through March 2020 shows that even though Hispanic and Black customers were slightly more likely than white customers to attain employment after receiving services, white workers earned an annualized median wage of $27,540, while Hispanic and Black workers earned $26,460 and $22,552, respectively. All of these wages are below the comparable 2019 median wage of $34,248.*
Disparity in annualized median wages among workers who used WIOA services
One reason for the disparity may be occupational segregation: Even when workers enter the same industry, nonwhite workers are more likely to enter lower-paid occupations than white workers. For example, while health care and social assistance is the largest destination industry for individuals exiting the public workforce system, 17.6 percent of white workers go into health care practitioner and technical occupations, with a median wage of $69,870, compared with 9.6 percent of Hispanic workers and 10.3 percent of Black workers. Hispanic and Black customers are more likely to work in health care support occupations—and commonly occupy undervalued home health and personal care roles that pay a median wage of $27,080. These jobs employ 13.5 percent of Hispanic and 12.8 percent of Black customers, compared with 9.9 percent of white customers. Similarly, while women are more likely than men to attain and retain employment up to a year after exiting the public workforce system, their median annualized earnings are 19.2 percent less than those of their male counterparts.* And only 1.1 percent of women and men went into “nontraditional employment”—a field in which one gender comprises less than 25 percent of individuals employed—down from highs of 2.6 percent and 1.9 percent, respectively, in 2016.
But workforce development should not reflect disparities in the labor market—it should strive to better them. There are few opportunities for a social system to actively influence an individual’s employment trajectory—particularly that of an adult. But from July 2019 through June 2020, even in the pre-pandemic era of historically low unemployment, more than 11 million people interacted with the public workforce system in some capacity. The time is now for the workforce development field—including federal and state oversight agencies and local workforce development boards and career centers—to leverage its unique position to ensure that customers have equitable access to good jobs.
3 ways the workforce development system can seize this moment
The workforce development system, acting as an intermediary between employers and jobseekers, can and should take action to support the imperative for quality and equity in the labor market.
1. Reorient the demand-driven mission around job quality
WIOA espouses a demand-driven model that centers the employer at the heart of the workforce system, guiding staff and organizations to be primarily responsive to local and regional employment needs. To be sure, employers must be embedded in the mission of employment organizations—employer partnerships are critical to finding people jobs. But employment that is agnostic to job quality runs counter to the mission of WIOA, which is not just to create access to the labor market but also to help people stay and succeed in it. Public workforce development systems are small, and training vouchers and staff capacity are limited. Low-paying jobs without proven career pathways should not merit the same attention as jobs that pay decent wages and benefits. Employers who partner with the public workforce system are often beneficiaries of government spending on wage and training subsidies, so they should be required to meet minimum thresholds of wages, benefits, and other metrics of job quality. Doing so will mean they generate less turnover, have higher productivity, and realize cost savings on recruitment and retention.
Employment that is agnostic to job quality runs counter to the mission of WIOA, which is not just to create access to the labor market but also to help people stay and succeed in it.
There are several examples of scalable progress in this area. EmployIndy—Marion County, Indiana’s, workforce board—is using ARP funding to create a “preferred training provider” list to lead jobseekers to good and promising jobs, and it has partnered with regional workforce, economic development, and industry to direct employers to Ascend Indiana, a job-matching platform that requires employers to meet a salary minimum and offer benefits to jobseekers. Pennsylvania has developed a methodology to identify “High Priority Occupations”—including wage as a proxy for job quality—to prioritize education and training investments. California’s High Road Training Partnerships initiative started as a pilot from the state’s workforce development board that prioritized sectoral partnerships that deliver equity, sustainability, and job quality, and it has grown into a broader set of policies and principles that would apply across the state’s workforce system. At the federal level, the U.S. Department of Commerce’s Good Jobs Challenge, intended to help train Americans for good jobs, defines a quality job as one that exceeds the local prevailing wage for a regional industry, includes basic benefits and/or is unionized, and provides a career pathway. WIOA should require local standards for job quality to prioritize service provision, but local areas can do this now—and several already have—in advance of federal guidance. Doing so will achieve significantly better outcomes for all customers.
2. Address the role of segregation and bias in the job market
The unemployment rate may be dropping, but it masks differential employment and wage outcomes for workers based on race and gender identity, among other immutable characteristics. Black and Hispanic jobseekers consistently have double the unemployment rate of white workers in the labor market. Yet WIOA does not touch on the topics of race and gender. Jobseekers may have access to more specialized services if they have pre-defined barriers to employment—if, for example, they are displaced homemakers, ex-offenders, English language learners, or low-income or long-term unemployed. And certainly, there is overlap between these categories. But focusing on such barriers treats only the outcomes of systemic prejudices—not the prejudices themselves or the systems that perpetuate them. Most homemakers, for example, are women. And most English language learners are immigrants to this country, overwhelmingly of Central American, Latin American, or Asian origin. And Black families, subject to years of housing and labor market discrimination, have the lowest wealth of any racial or ethnic group in America.
Workforce systems must orient their missions and their practices in ways that address the systemic inequality and occupational segregation that many of their customers have faced—and will face—when interacting with employers.
When working with jobseekers at their most vulnerable, workforce systems must orient their missions and their practices in ways that address the systemic inequality and occupational segregation that many of their customers have faced—and will face—when interacting with employers. As a starting point, local systems, like all employers, must ensure that their leadership, staff, and community partners are reflective of the population they serve. To hold all partners aligned and accountable, systems should develop racial equity goals and report program-level outcomes—not just participation—and should do so at the intersection of multiple identities, including race and gender. Several cities, workforce boards, and national philanthropic and research partners have partnered to develop workforce equity metrics in order to address disparate employment outcomes, and previous research at the Center for American Progress has suggested that job quality measures—such as those discussed in the previous section—are particularly critical to report at a disaggregated level. At an implementation level, workforce programs should actively direct women and workers of color to occupations with decent wages, benefits, and job protections—ones in which they are often underrepresented. Workforce development is not sole the solution to the country’s equity and job quality problems, but it can certainly create an ecosystem in which those problems are not perpetuated.
3. Leverage unique connections to government-funded or regulated jobs
A tight labor market and a pandemic has forced the United States to reexamine its systems, creating an opportunity for the workforce system to leverage its position and become part of the conversation about how to “fix work.” The best place to start is where there is the highest likelihood of influence or commonality: the several industries or occupations in which government, as either the funder and contracting entity or the direct employer, has the right and responsibility to ensure that public dollars go toward high-quality, equitable employment. The public workforce system should coordinate with federal, state, and local government to ensure that its customers have equitable access to high-quality employment opportunities that pay decent wages and benefits.
One example of such employment is in the construction and trades industry, most recently funded by the Infrastructure Investment and Jobs Act (IIJA). The IIJA is a once-in-a-generation piece of federal legislation, estimated to create millions of meaningful, family-sustaining employment opportunities in construction and skilled trades. It is critical that these jobs are good jobs for underrepresented workers, including women and communities of color. Efforts to recruit and train diverse workforces—paired with steps to ensure that contractors hire and retain diverse workers—must include partnerships with the public workforce system. To achieve this goal, federal and state infrastructure and labor agencies should first incentivize or require collaboration among funded projects and public workforce system actors. On the local level, workforce boards and career centers should collaborate directly with unions and contractors to ensure their customers have access to quality jobs.
Similarly, health care and social assistance is the largest destination industry for individuals exiting the public workforce system. These occupations, so critical to the health and safety of the nation, are consistently underpaid and undervalued. Child care, home care, and other health care support occupations are subject to significant federal and state oversight and funding. If the U.S. Department of Labor-funded public workforce system is to continue directing jobseekers to opportunities in these sectors, it should be a required partner at the table with U.S. Department of Health and Human Services agencies providing input and guidance to ensure that subsidies and reimbursement rates for child care, home care, and health care support jobs reflect what it actually costs to provide quality care, instead of relying on market rate surveys that perpetuate low wages for care professionals.
This work will require clear federal guidance and adequate funding to truly scale. Since 2001, workforce development formula funding to states has declined by 40 percent, adjusted for inflation. Federal investment in the public workforce system and reauthorization of WIOA would create stronger imperatives for equity and quality. But the incredible, committed workforce development organizations and professionals across the United States also have an opportunity right now to change trajectories for jobseekers, workers, and employers alike.
* Wages were calculated for adults exiting WIOA programs in FY 2019 (April 2019 through March 2020). Median annual wage rates were calculated by annualizing median wages recorded for the second quarter after exit.
The author would like to thank Jared Bass, Rose Khattar, Arohi Pathak, Lorena Roque, and Karla Walter for their input on this article.